Real estate remains one of the most popular ways to invest money. It’s considered a surefire investment that simply requires a bit of knowledge and a lot of patience. However, not everyone knows the ins and outs of the real-estate market enough to make their investment profitable. Learning is the first step towards being able to make a very high return on your investment. Here are some things you should know before you dip your toes in the market.
Choose the right property
How do you find the perfect property to invest in? Don’t let the complexities of real-estate fool you, it’s as simple as any other investment. You need to purchase an asset that will accrue value over time so that you’re able to sell it for a higher price later on. As simple as it sounds, it’s still extremely difficult to pull off properly if you don’t have all the necessary information at your disposal. This means you have to do your research first.
Determining the true price of a piece of real-estate should be your first order of business. However, it’s a lot harder than it seems. If your gut tells you that a particular property seems lucrative, you should call for an independent evaluation. This way, you can be sure that the starting price is alright.
Lenders and mortgage insurers have essential information that can help you see If properties are going to end up being more valuable over time. Try to befriend them and access that information.
Location is everything
Properties hold value, but that value is determined by a couple of different things. Chief among them is their location. If you’re looking to invest in any kind of property, you need to make sure that you really nail the location.
There are a couple of things that you should keep in mind when picking out the property. First of all, how far is it from the city centre? Being close to the hustle and bustle of town means that it’s convenient and commutes to work are much shorter. This makes it more desirable for potential purchasers.
Look for something that has low property taxes. This depends partially on location, but it’s also a very important factor to consider. Nobody wants to find themselves in an area with a high crime rate and no job opportunities, so make sure you check whether there’s a booming job market.
Make use of tax strategies
Every dollar that goes into taxes is a dollar that could have been used in future investments. Because of this, you want to minimize the amount of money you lose to taxes when purchasing and selling properties. This is one of the key pillars of building any kind of sizeable wealth.
Luckily, the real estate business allows you many avenues to reduce potential taxes. Depreciation, mortgage interest deductions, and maintenance are great examples that can help you ease the burden taxes put on your profits. You can even become an agent to make use of the unlimited passive losses that are granted to official agents.
Tax laws are inevitable, but they’re also liable to changes every so often. You have to stay up-to-date on any and all changes to real-estate tax laws. Every year, you need to have a thorough talk with your accountant in order to review the changes and make sure you formulate a plan accordingly.
When it comes to investing in real-estate, pride won’t get you anywhere. At any given moment, there are probably thousands of people working on investing in various properties in your own city. Do you think that they are doing all the work on their own? It’s difficult enough getting to know the broad strokes of investing in properties, the details are even more difficult to master.
Finding properties, evaluating them, and getting good prices are tasks that one person can’t possibly handle on their own. Most investors will seek help from experts like Curtis Associates before actually making a big financial move. You would be wise to consult legal help as well. You don’t want to be left to your own devices in such a competitive market.
Pick your mortgage
Financing your investment property is a big step that you need to take with care. This area is particularly delicate because it has a big influence on your financial well-being. The type of loan you pick is crucial.
Do you decide to choose a fixed or variable loan? Over long stretches of time, variable loans have been proven more efficient in certain investments, but there are lots of factors to consider. If you take out a fixed loan at an opportune moment, you could end up profiting more. Rates rise alongside property prices, which means you don’t have to worry about losing out on the capital gains front.
If you wish to dabble in the real-estate market, you have to be aware of the things that make it easier for you to make money off of it. Follow some of these tips and you can rest assured that your potential investments will end up being quite lucrative eventually.
Author: Emily Wilson
“Emily is a business psychologist and a real estate appraisal specialist. She works as a blogger and occasionally works with property consultants in Sydney. Besides that, she loves animals and travelling.